Here's another section in the statue that gives the sheriffs latitutde for residents in neighboring states. We're shall issue for residents.It says shall issue in the first paragraph. ORS 166.291 - Issuance of concealed handgun license - 2011 Oregon Revised Statutes
(8) The county sheriff may waive the residency requirement in subsection (1)(c) of this section for a resident of a contiguous state who has a compelling business interest or other legitimate demonstrated need.